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2014 (5) TMI 209 - HC - VAT and Sales TaxNature of Sale Inter-state sales or local sales Held that:- Judgment in CCT, Bihar Vs. Bhag Singh Milkha Singh [1973 (5) TMI 94 - PATNA HIGH COURT] followed The obligation to take goods outside the State may be either an express covenant or an implied one under the contract by a mutual understanding and it is not necessary that in all cases, there must be direct evidence showing certain obligations - The obligation could be inferred from circumstantial evidence also - Relying upon Oil India Ltd. v. Superintendent of Taxes [1975 (3) TMI 96 - SUPREME COURT OF INDIA] it was held that for a transaction, to be an inter-State sale, there must be a movement of goods occasioned by the said sale from one State to another - No matter in which State the property in the goods passes, the movement of goods occasioned by the sale from one State to another would make a sale as one in the nature of inter-State sale - It is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement and it is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant regarding inter-State must be specified in the contract itself - The decision was applied in Union of India Vs. Khosla & Co. Ltd. [1979 (3) TMI 176 - SUPREME COURT OF INDIA] Whether insurance charges borne by purchaser decisive of nature of sale Held That:- Also relying upon Co-operative Sugars (Chittur) Ltd. Vs. State of Tamil Nadu [1993 (4) TMI 270 - SUPREME COURT OF INDIA] It was observed that the movement of goods was an incident of sale or purchase; amounted to an inter-State sale or purchase and it is not necessary that the contract of sale has to expressly provide for the movement of goods; it was sufficient that the movement of goods is implicit in the sale - Therefore, the criteria for considering the transaction as an inter-State sale or not, is the movement of goods intimately connected with the sale - The fact that the purchaser had borne the insurance charges or the seller had borne the insurance charges or that the purchaser had moved the goods at their own cost would not be a decisive factor for the purpose of determining the nature of sale as inter-State sale or not - The Tribunal and the other authorities had misdirected themselves in placing emphasis on the transport and insurance made by the purchaser as indicators of the sale being a local sale - Order of the Tribunal Set aside Revision allowed Decided in favour of assessee.
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